RMI 3501 Lecture Notes - Lecture 1: Employee Retirement Income Security Act, Fiduciary
15 Mar 2018
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In addition to these burdensome compliance issues, employers may get roped into litigation as the alleged plan sponsor and/or fiduciary. When sued for benefits, insurers of voluntary plan benefits may want to avoid state law claims, which often expose the insurance company to a wider range of claims and potentially larger awards of damages. A strategy employed by insurers to avoid state law claims is to argue that the employer did not satisfy the requirements of the voluntary plan safe harbor and the claimants exclusive remedies are limited to erisa. If successful, this may require the employer to get involved in expensive litigation as the plan sponsor and even a plan fiduciary. Indicate and briefly discuss two precautions an employer might take to make sure this does not happen. Generally, there are four requirements of the voluntary plan safe harbor.
